AMG Financial Services
Our Product is Simple.
We provide a solid financial tool to people who
want a safe, stable, easy to understand financial
tool that is not subject to stock market volatility
or interest rates and provides them above
Life Settlements have existed for more than 100 years,
but until recently were often arranged privately
between friends and family members.
Life Settlement Companies were founded to meet the
needs of individuals who have life insurance they no
longer want or need, that can legally be sold to a new
owner who will collect the benefit when the insured
What is a Life Settlement?
A Life Settlement is the purchase of the Financial
Benefits of an individual’s life insurance policy.
Simply put, the insured are individuals who have
determined they have excess life insurance, who
will receive more than the Cash Surrender Value by
selling their personal property, (a life insurance
policy) on the open market.
Each insured has a Medically Determinable Life
How Can I Own Someone Else’s
Life Insurance is Personal Property. Just like you sell your used
property, anyone can sell their life insurance policy.
As the new owner you now have the full right to name someone as
the new beneficiary. It’s just like owning life insurance on yourself
except here the insured is someone other than you.
When that person passes away your named beneficiary will receive
the death benefit.
Why Do People Sell Their Policies?
Financial Planners, Estate Attorneys, Tax Attorneys, CPA’s, or
Insurance Agents council their clients to take advantage of
selling their excess life insurance.
They have become wealthy enough to “self-insure”
Change in Tax or Estate status
Change in business ownership,
Key Man Insurance policy not needed
Death of the policy’s beneficiary
Change in family status: Children get married, move out
Desire to donate to a favorite charity
Insured may realize profit by selling vs. cash-surrender value
Illness forces sale for financial/employment reasons
Finding The Right Policy
AMG Financial Services finds you a policy that meets your
financial needs. All policies sold to clients exist as a policy that
has been sold as a Life Settlement.
Each policy will have a Life Expectancy Certificate that provides
you a medically qualified opinion of the insured’s prognosis of life
Each policy is written by an “A” rated or better USA Life
Insurance Company who contracts to pay the Death Benefit to the
current owner’s beneficiary.
You, along with a Third Party Administrator, will review all
documentation regarding the policy to your satisfaction.
Ownership Purchase Agreements
The supplier of Life Settlements to AMG Financial Services has
developed proprietary purchase contracts designed to identify a
specific owner of a specific policy for purchase to avoid
substitution of policies.
These contracts detail how the funds are escrowed and disbursed.
Premium notices are sent to the owner of the policy for payment.
Insurance Policy Contract
Each policy’s terms are reviewed to identify any potential
problems and ensure transfer of ownership. Some terms can
be exclusions regarding transferring of policies, policy
lapses, exceptions, etc.
Some of the policies are owed by trust and not individuals.
Also reviewed is the Irrevocable Life Insurance Trust
Agreement to make sure the policy can be transferred.
Beneficiary Release Contracts
Proprietary contracts will be drafted specifically for you and
serve as legal contracts designed to identify the beneficiary
who would expect to benefit from the death of the insured.
Our staff will obtain the appropriate Power of Attorney from
all parties to allow the insurance representative of AMG
Financial Services to act on behalf of the parties in the
transaction to effect the purchase of a life insurance policy.
The insurance company will confirm policy details in writing
with copies of the necessary forms for policy owner and
How Medical Underwriting
Life Expectancy is the average number of years remaining in a
person’s life at a particular age, based on a scientific review of
their past medical history and their current medical status, as
determined by Board Certified Medical Professionals and
Actuarial Life Tables.
Actuarial Life Tables
Actuarial Life Tables have been established by the
Life Insurance Industry actuaries. They collect
and analyze life expectancies for the US
population, based on a 100+ year history of deaths
occurring on an annual basis. These tables have a
deviation error of less than .005%
Medical Release Form
All individuals insured by the policy of interest must agree to
sign all necessary medical release forms for all medical records
and information pertaining to their recent health status and past
This release shall remain valid for the life time of the insured
and further, that the insured agrees to periodic reviews of their
current health status by the policy owner or their agent.
Who Performs the
Life Expectancies are performed by certified medical
laboratories or by board certified physicians who are
independent contractors that are industry recognized specialists.
They utilize medical science and known industry actuarial
methods in their evaluation models.
Life Expectancy Factors
• Age • Smoking
• Sex • Education
• Past medical history
• Family medical history
• Alcohol • Marital status
• Weight •Physical activity
Actual Life Settlements Clients
Purchase Price Policy Face Values
•Premiums must be paid to continue the Policy in force. Typical premiums are
estimated at 4% annually of the Policy Face. All projected returns are based
on the Insured’s Life Expectancy.
The insurance partner of AMG Financial Services has
developed a national relationship with policy brokers who
can provide a range of $20,0000,000 to $40,000,000+ a
month in face value of policies.
They developed proprietary financial software to evaluate
Due to our strict purchasing requirements, not all policies
are accepted. Typically we find one out of 10 that meet all
our requirements for purchasing.
Projected Returns on Life
What amount of return do you expect to receive in
5%, 8%, 10%, 15%, 20% or more?
A Life Settlement’s Contracted Return is typically 22% to
40% annualized return.
Dependant upon the specific policy you choose, your return
may be more or less.
An Actual Policy Scenario
Insured: An 85 Year Old Female
Certified Life Expectancy: 3 Years
Premiums Paid Up For: 4 Years
Face Value of Policy: $ 500,000
Purchase Price: $ 250,000
Annualized Simple Interest Return: 33.3%
An Actual Policy Scenario
Insured: An 74 Year Old Male
Certified Life Expectancy: 4 Years
Premiums Paid Up For: No Premiums
Face Value of Policy: $ 1,000,000
Purchase Price: $ 380,000
Annualized Simple Interest Return: 40.0%
The Policy You Purchase
You become the owner
You name the beneficiary(s)
You hold the actual policy
You can change the beneficiary as often as desired
The policy is Non-Contestable with the suicide clause
The policy issued by a US insurance company rated “A” or
better by A. M. Best.
Verification of coverage/fraud prevention.
Medical evaluations from Certified Medical
Laboratories or Board Certified Physicians.
Administrate all policy changes to make you the owner
and irrevocable beneficiary.
Provide all closing documents to you including the
documents necessary to transfer the life insurance policy
into your name.
Take possession of Life Settlement Policy.
Life Settlements as a Financial
The flexibility of Life Settlements as a financial tool is
limited only by your imagination
• Purchase real property • Insurance for
• Collateral on loans uninsurable people
• Increase church
• College fund
• Estate planning • Incentives for key people
• Charitable giving • Fund employee benefits
• Settle claims • Reduce tax liability
• Build net worth
• Guarantee investor funds
“Reducing Obstacles to Building Wealth”
July/August 2001 Offshore Finance USA
The three main impediments to building wealth
1 poor investment performance
Tax-free death benefits: generally, there are no income or
capital gain taxes on a death benefit paid to a named
beneficiary. Estate taxes may apply, depending on the
ownership of the policy.
Robert Burkarth, vice president
Prudential Securities, Inc
New York, NY
•Always seek tax advice from your personal advisors, each persons circumstance may vary.
•Not a paid advertisement, or inducement to evade taxes.
Real Estate Purchase Example
• Land cost too high • Life Settlement
• Appraised below • Life Settlement
owner’s price point
• Need for expansion • Life Settlement
of current capital
• Need to expand • Life Settlement
number of potential
Life Settlement Solution
Financial Model Cash Needed Collateral
Office Plaza $ 1,104,000 $ 1,425,000
DuPont Airport Pub 1,100,000 2,000,000
Trinity Road Restaurant 2,350,000 3,000,000
Opening/Conversion Expense 500,000 -
Purchase LifePolicy($10mm@14%) 1,400,000 $10,000,000
LS Premium Reserve @ 4% (2 yrs) 800,000 800,000
Bond Wrap @ 6% of Face LS 600,000 -
Prismm Acquisition ( 5 restaurants) 2,000,000
Working Capital 146,000 __________
Totals $10,000,000 $17,225,000
LTV = 58%
Loan Secured by Collateral, Life Settlement Insurance Policy and Bond Wrap that will guarantee payment
of loan before term. EBITDA on 7 restaurants will fund loan payments until paid in full at a ratio of 2:1.
At present, AMG Financial Services does not secure for clients the financing through banks but we
will collaborate with your bank to collateralize loans using life settlements.
Retention of Key Personnel
• Life Settlements offers a • $100,000 in a Bonus Pool
unique opportunity to can be expanded to over
provide current capital $250,000 along with
expansion in order to favorable tax benefits.
retain Key Personnel.
• Payment of bonuses, • Deferring of current
incentive payments, or bonuses to future
performance rewards is payments allows the
limited only by one’s recipient to enjoy
imagination. flexibility in tax planning
The rule of large numbers reflects how we can benefit from
owning several policies in the form of a “Portfolio”.
When we own more than one policy the likelihood of a policy
maturing increases. Therefore the more policies we own the
more likely the event of a policy maturing.
We now have enhanced the probability of the maturity of our
1,000 Acres Loan Proceeds - $750,000
Land Cost - $450,000 - 450,000 Land
- 200,000 Purchase Life
Bank Loan -$750,000 Settlements
Term 6 Years - 100,000 Premium Escrow &
Interest rate prime + Surety Bond
Collateral = Land + Life
The Life Settlements and the Surety Bond will pay off the loan. You borrow
enough cash to buy the land, buy the Life Settlements with the covering bond,
and cover the premium payments on the Life Settlement. Loan is paid off on/or
before the term. At present, AMG Financial Services, does not securitize life
settlements but we are able to arrange buyback guarantees.
In The News
Senior Market A D V I S O R
SMA March, 2002
“Reining in the Viatical Rep”
By Mary Hillebrand
If life settlements are good enough for Warren Buffett, shouldn't they be good enough for
everyone else? Last October, Gen Re, the global reinsurance and risk management arm of
Buffett's Berkshire Hathaway Inc., arranged a financing facility upwards of $400 million for
Living Benefits Financial Services LLC, a life settlements funder in Minnetonka, Minn.
Similarly, sources close to Life Equity LLC, of Hudson, Ohio, say that company has also
secured a comparable amount from Buffett's group.
A new way of doing business
2002 is starting off on a better foot, some of the bigger life settlement companies say,
thanks to new funding arrangements with Gen Re. The reinsurer has brought consistent
financial backing and a name that will inspire more confidence in the life settlement
business, argues Steve Ballard, CEO of the Norseman Group, a marketing and brokerage
company based in Minneapolis. "Berkshire Hathaway/Gen Re adds huge prominence and
credibility to this business. It has generated a ton of business and has opened doors that
previously weren't open to us."
Purchasing Flow Chart
Life Settlement Purchaser
Purchase Review Policy and
LE Provided By AMG
Life Settlement Fin. Svcs. – Okays and
Delivers Policy to Escrow
Verifies the Policy, the Premium, Purchase Signed
the Medical Certificate and
Disperses Funds to Seller,
AMG Fin. Svcs. and sends
advice of Transfer to the
Purchaser as Proof of
transfer to the New Owner
Your money is retained in a third-party escrow account under your control until every aspect of
the purchase is satisfied to your full extend of acceptance.
• Life Settlements avoid the risks of the volatile Stock and
• To our knowledge, no other product gives you the
flexibility of Life Settlements.
• Nor does any product in the market place today offer the
potential returns that a Life Settlement provides.
Start backing your company revenue, pension plan investments,
project funding, real estate development and other monetary
concerns with Life Settlements.
Contact us today:
Cindy Castano Swannack, President
AMG Financial Services
3195 Selhurst Court
Fayetteville, NC 28306
Call Toll Free 866 547 7009